TDS on advertsing

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Samir

Samir (Querist)
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23 July 2007 Hi,

whether advertsing agency needs to deduct TDS when they make payment to media?

Shyam Lal Naik

Shyam Lal Naik (Expert)
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24 July 2007 Hi Samir,

I feel the amount will be subjected to TDS u/s 194C @ 1%.

It has been clarified that:

When the advertising agency makes payment to their models etc. TDS is deducted u/s 194J.

When advertising agency makes payment for production of programme, the payment is subjected to TDS u/s. 194C @ 2%.

When payment is made directly to the media, payment is subjected to TDS u/s. 194C @1%.

The publishing/broadcasting of advertisement materials in the media by the agency is in pursuance of a contract between the agency and the media for the purpose of advertisement. Hence the payment should also be subjected to TDS u/s. 194C @ 1%.

However, I would like the query to remain open. Lets hope, a better and final solution by our penal of experts.

CA Nikita

CA Nikita (Expert)
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24 July 2007 hi!!

Here is something which will help you indeed...

"During the course of the consideration of Finance bill,1995, the Finance Minister clarified on the floor of the House that the amendment provisionsof tax deduction at source would apply when a client makes payment to the advertising agency and not when advertising agency makes payment to the media, which includes both print n electronic media."

Mr. Shyam Lal Naik have given details of the rate n other factors but ur concern will be answered n resolved from the above statement...

Samir

Samir (Querist)
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24 July 2007 Thank you.

So advertising agency does not need to deduct TDS when they make payment to media

Sanjeev Kumar Varshney

Sanjeev Kumar Varshney (Expert)
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25 July 2007 Samir,

Payment made by an advertisement agency to print media or electronic media is not subject to TDS under section 194 C. Please refer to circular No 717 dated August 14,1995

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